Prominent economist Tony Alexander has released a new report arguing that “fear of overpaying” (FOOP) is behind the collapse in home sales and the ballooning in listings across New Zealand. Because the buyers have slipped back into the shadows. Only 11% say listings are a worry and a still low 11% say employment is a concern, unchanged from September. The Reserve Bank has flagged further aggressive interest rate hikes in an effort to contain runaway inflation, which hit a 32-year high 7.3% over Q2. My view is that so long as the Reserve Bank continues to lift rates, New Zealand house prices will continue to fall.

Source: Otago Daily Times August 15, 2022 22:51 UTC